Clara Auyon talks about what this Mexican company has done to gain a good reputation in the US.

Coppel Mexico, specializing in household goods and clothing, is one of the largest department store chains in northern Mexico. Compared to Sears and JC Penney in the US, it is the second-largest chain in Mexico for the sale of furniture and articles for the home. The Coppel chain operates more than 300 stores in every Mexican state under the Tiendas Coppel name and almost 200 shoe stores under the name Tiendas Coppel-Canada.

At the end of the first quarter 2006, Coppel was operating 306 stores and 176 Tiendas Coppel-Canada stores in 134 cities in Mexico. The company has a network of 74 distribution centers, 10 warehouses, and a maintained fleet of 241 trucks as well as smaller vehicles. Coppel’s furnishings division last year accounted for 72% of sales and the clothing division accounted for 28%.

About 88% of Coppel’s 2005 sales were made on credit. The other sales were made in cash or by credit or debit card. Coppel’s credit charges allowed it to gain a profit from beyond covering its own finance costs and other costs related to credit sales, such as administration and absorbing bad debts. The company had about 9.9 million customer accounts, of which 4.3 million were active, and its own proprietary credit card.

Necessary move
In 1990, Coppel Mexico established Coppel Corporation headquartered in Calexico, California. The move was aimed to help find the company find and develop new vendor relationships and send materials to its headquarters in Mexico. According to Clara Auyon, general manager of Coppel Corporation, the move was necessary as it was hard for Coppel Mexico to find vendors in the US, as many companies didn’t believe in Mexican businesses.

Coppel Corporation employs a combined 80 employees through its warehouse in Calexico and sourcing office in San Diego. Coppel Mexico employs more than 36,000.

The US division, according to Auyon, is for sourcing, purchasing, and finding products from countries all over the world. “We’re sending our buyers to look for products and participate in shows in places like Germany, Taiwan, China, Spain to find products for our customers,” she said. Last year, Coppel Corporation sold $100 million in products to Coppel Mexico. This year, Auyon’s goal is to have the company sell about $200 million.

The best policy
Gaining credit in the US was a challenge for the first few years of operations, according to Auyon, but one that fortunately no longer exists. Companies in the US started to realize that although we were a Mexican company, we still have an office in the US, explained Auyon.

To gain a positive reputation for Coppel, Auyon said she used to pay vendors five to 10 days before payment was due for all shipments. “You have years to build a reputation and one second to lose it. We wanted to prove we were a company people can trust by paying on time and being honest. We can say a lot of things—words go in and out, but we had to prove ourselves,” she said.

For instance, Coppel Corporation lost a container that was shipped from a vendor a few months ago, but sent a check to the company anyway. The CEO of that company called Auyon, surprised Coppel Corporation still sent a check. “I told him that someone had stolen the merchandise but it was my responsibility and not his company’s fault,” Auyon said. The CEO appreciated Auyon’s honesty, and returned the check to her—$62,000 worth—opting to work through the problem by filing a claim using his company’s insurance.

“We’ve developed strong partnerships and gained trust with our vendors. Honesty has been our best policy. That’s what Coppel is about,” concluded Auyon.